The future of manufacturing and development: three things to remember

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By Annalisa Primi, Head, Structural Policies and Innovation, OECD Development Centre 


To learn more about countries’ strategies for economic transformation, follow the 10th Plenary and High-Level Meeting of the OECD Initiative for Policy Dialogue on Global Value Chains, Production Transformation and Development in Paris, France on 27-28 June 2018


shutterstock_444327613Not all factories are the same. Today, their differences are bigger, more impressive and carry far-reaching implications for development in developing economies. Since the 1970s, industrial production has been organised in complex, multi-country networks of suppliers and providers. The conventional expectation was that this trend would be conducive to growing homogeneity, with converging techniques of production, salaries, standards and business organisation in the “world factory” system. However, as things do not often go “by the book”, manufacturing today encompasses far different realities. China has become the world’s leading manufacturing country. Early industrialisers have built complex value chains, delocalising non-core manufacturing activities to developing economies with relatively lower labour costs and growing domestic markets. The result: manufacturing is a collection of deeply different systems. And differences exist even within the same sector. Just look at the textiles industrial parks in Ethiopia that manufacture for and export fast fashion brands, such as Spain’s Zara. Or look at the robot-powered, fully automated smart factory of Adidas in Germany, which has been making customised mass production of textiles a reality in Europe since 2016. Consider the artisanal, luxury, on-demand, tailor-made production of Lamborghinis in Emilia Romagna, the highly automated export-oriented Audi production in Mexico, and the vertically integrated, only partially automated, domestic market-oriented BYD electric vehicle factory in Shenzhen, China. Continue reading

Turning a commitment into actions

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By Mario Cerutti, Chief Institutional Relations & Sustainability Officer, Lavazza Group


To learn more about countries’ strategies for economic transformation, follow the 10th  Plenary Meeting and High-Level Meeting of the OECD Initiative for Policy Dialogue on Global Value Chains, Production Transformation and Developmentin Paris, France on 27-28 June 2018.


logo TOward2030At the beginning of 2017, Lavazza launched ‘’Goal Zero’’ – a call to collective action amongst our many stakeholders to pursue the 17 Global Goals of Agenda 2030 for Sustainable Development. The company decided that co-operation, instead of going it alone, is fundamental for any significant results. Still, we faced the question of how to engage different stakeholders in one all-encompassing plan. For Lavazza, answering this means engaging our different stakeholders – employees, youth, suppliers and the surrounding community – using tailored communications tools. We believe that only a strong commitment originating from within Lavazza can, in turn, fuel external communications. So, here’s how we are proceeding:
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Lessons learned from structural transformation in least developed countries

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By Daniel Gay[1], Inter-Regional Adviser on LDCs, UN Department of Economic and Social Affairs

To learn more about countries’ strategies for economic transformation, including a session on Least Developed Countries (LDCs), follow the 10th Plenary and High-Level Meeting of the OECD Initiative for Policy Dialogue on Global Value Chains, Production Transformation and Development in Paris, France on 27-28 June 2018 

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Bangladeshi garments workers in Dhaka, Bangladesh. Photo: Shutterstock.com

At Leather Wings, a small shoe-making outfit based in central Kathmandu, four women sit in a small room cutting up bright red cowhide imported from India. Next door, a dozen of their colleagues stitch the shapes together on sewing machines. The owner Samrat Dahal says the boots, designed by a German expat, sell via the Internet in India, China and Italy.

The company, founded in 1985, sums up some of the issues facing the Nepalese economy: entrepreneurial leaders at the helm of a committed workforce making a competitive and quality product for which overseas demand is ample. The problem isn’t finding buyers; it’s scaling up production to meet that demand. Exports by the handful of players in Nepal’s shoe industry totalled only USD 23 million in 2015. The task of boosting production in Nepal is doubly pressing given that the country already meets the criteria to graduate from the least developed country (LDC) category, something that the government wants to happen as soon as 2022. Nepal’s productive capacity predicament is typical of many LDCs. Moving onto a path of long-term prosperity requires structural transformation that expands production via manufacturing, services and higher-productivity agriculture.

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What can governments do to harness the potential of new technologies?

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By Eduardo Bitran, CEO and Deputy Chairman of the Chilean Economic Development Agency (CORFO).

To learn more about countries’ strategies for economic transformation, learn about the 9th Plenary Meeting of the OECD Initiative for Global Value Chains, Production Transformation and Development hosted by the Economic and Social Commission for Asia and the Pacific (ESCAP) in Bangkok, Thailand on November 2017.

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Facilities to refine the copper from the mine in Chuquicamata, Chile

Chile is considered a success case, and Chileans today are much better off than a decade ago. However, inequality is persistent and the knowledge base of the country is still limited. What the country also faces is a productivity challenge. Chile’s total factor productivity growth has decreased from 2.3% per year in the 1990s, to a yearly rate of 0.3% from 2000 to 2009, and then to -0.2% after 2010. These trends lasted through several government terms. So, what needs to be done to sustain the country on its path towards development?
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